Before Scotland’s 2014 independence referendum, David Henry’s interest in politics rarely extended beyond following it on TV.
But the campaign — despite failing by 45-55 per cent — captivated the London-based television production company executive and he became an activist for the Scottish National party.
“I joined the SNP a day after the referendum in 2014,” said the 58-year-old who grew up in Edinburgh. “It was an amazing time . . . I found it very invigorating.”
He was not alone. Tens of thousands of people joined the party after the vote, transforming it into a political juggernaut with more than 125,000 members at its peak.
But Henry was among seven supporters who complained to the party and then in 2021 to the police over a lack of transparency about money the SNP had raised to fight a second independence referendum. The move would spark a police investigation and the scandal has triggered ructions that are threatening the dominance of the party, which has held power in Scotland for 16 years.
Longstanding SNP divisions over strategy and governance exploded into the open this year during a bitter contest to replace Nicola Sturgeon as leader, and the turmoil deepened last month when police investigating the party’s finances arrested both its former chief executive and treasurer. The allegations have left Sturgeon’s successor, Humza Yousaf, struggling to restore unity and fend off Scottish Labour.
The seeds of the crisis date back to 2017 when Sturgeon demanded that Downing Street grant Scotland the right to hold a second referendum, and the party later launched a fundraising drive for the campaign. At the end of 2021 the SNP said the drive and another referendum-related appeal had raised more than £740,000.
Six years on from the launch, however, Scotland is no nearer to holding another referendum after successive UK prime ministers refused to allow it and the Supreme Court ruled last year that Sturgeon did not have the legal authority to unilaterally hold a vote.
Former supporters, including Henry, who contributed to the fundraisers said they went to the police after being dissatisfied with the party’s response. They have accused the party of diverting the money to other things, instead of ringfencing it as promised for an independence campaign.
The money does not appear as a separate item in the financial accounts filed by the SNP with the Electoral Commission. Members started raising questions when the SNP’s 2019 filings showed that it had less than £100,000 in “cash and cash equivalents” but was saying separately that the independence appeal had raised £600,000.
The party has said the proceeds of the fundraisers were included in “and reconciled with” total donations collected from 2017 to 2021.
Figures filed with the electoral body showed annual donations more than tripled in 2017 to £1.4mn. A further £324,000 was raised in 2018 and £905,000 in 2019.
The latest available accounts, for 2021, show the party as having about £145,000 in cash and cash equivalents, prompting further questions about the whereabouts of the independence referendum campaign funds.
In its 2020 and 2021 accounts, the SNP acknowledged the growing disquiet over the lack of separate accounting for the referendum funds. But it also argued that since it was “a party of independence” every penny that it spent, “directly or indirectly”, was in support of the cause. It assured members that the money would be used to secure independence.
Critics such as Trish Spencer, a former party member who said she donated at least £25 to the referendum appeal, said this was disingenuous because contributors believed the money would be set aside and used only to fight an independence campaign.
Moreover, they argued that since the money was raised from independence supporters, and not just SNP members or voters, it would have been wrong to spend the proceeds on other things.
Spencer, who is not among those who complained to the police, said her money was returned after she objected. The 61-year-old retired nurse from North Lanarkshire said the SNP was — at the most charitable — guilty of “moving the goalposts”.
“I donated because they were specific in saying that it was for a referendum campaign,” she said. “At the very least, they should have come back and told people if they were diverting the money to other things.”
The SNP’s accounts do not shed much light on what the “referendum” money was spent on, and the dispute with the complainants on how literally the claim that it would be spent on a referendum campaign should be taken.
The 2020 accounts showed that the SNP spent almost £700,000 on office furnishings, computers and other equipment. This amount raised eyebrows among critics, including the pro-independence website Wings Over Scotland.
The site, a stringent critic of Sturgeon, was the first, in 2022, to report on a £107,620 loan made to the SNP in 2021 by Peter Murrell, the party’s former chief executive and Sturgeon’s husband.
News of the loan, which was not declared to the electoral authorities for more than a year, led to intensified public concern about the running of a party by a small group of insiders close to Sturgeon and her husband.
In the 2021 accounts, published last year, the SNP’s auditors, Johnston Carmichael, said they had assessed two areas — related party transactions and manual journal entries — as having a “heightened risk of fraud”. But there was no further explanation, and no suggestion that any evidence of fraud was detected.
The company declined to comment on its audit. Revelations last month that Johnston Carmichael had stopped working with the party around October last year heightened the sense of crisis over the SNP’s finances.
Murrell was at the centre of controversy surrounding membership numbers and perceived bias during the bitter succession campaign sparked by Sturgeon’s announcement in February that she was stepping down. He resigned as chief executive in March after the party admitted that it had about 30,000 fewer members than it had claimed at the start of the leadership race.
Then in April, Murrell was arrested as part of the police probe into the party’s finances. Colin Beattie, then treasurer, was arrested later in the month. Both men were released without charge pending further investigation. Police Scotland declined to comment on the investigation.
Caroline McAllister, a former member of the SNP’s national executive committee, said the controversy raised broader concerns about the running of Scotland’s governing party.
“I know people who contributed to the fund who were not SNP members,” said McAllister. “This is a party of government and they are taking money from people and saying it’s for a referendum, but then use it to prop up the party. That is not acceptable.”
The SNP said it had been “co-operating fully” with the police. “However it is not appropriate to publicly address these issues while that investigation is ongoing,” it added.
The impact is starting to be felt in the polls. In a survey by Ipsos released on Wednesday, support in Scotland for the SNP in an election to the UK parliament at Westminster was down 10 percentage points, at 41 per cent, compared with six months ago. Henry, meanwhile, has quit the SNP and joined the breakaway Alba party.
Additional reporting by Mure Dickie